Tehran, Muscat to close Gas Deal by July: Iran

Iranian Minister of Petroleum Bijan Zangeneh says Tehran and Muscat will finalize a gas deal by the end of June 2018.

The deal concerns construction of a subsea gas pipeline to transfer Iranian natural gas to the Sultanate of Oman, IRNA reported.

Speaking in Muscat on Wednesday evening, Mr. Zangeneh said the agreement for construction of the pipeline will be carried out in two parts, the first part of which will be completed by the end of May, and the other part will be completed by the end of June.

Referring to a meeting with Omani Minister of Oil and Gas Mohammad Al-Rumhi, Zangeneh said: “Things went well… today’s agenda was summed up and signed; I hope that this agreement will be finalized at the scheduled time.”

In response to a question about the reason for the delay in closing the deal, the Iranian Minister of Petroleum said: “There are many problems; we have to conclude a contract with a contractor that is endorsed both by Iran and Oman. In addition, there are several legal issues related to this subject which require more care and attention.”

Asked about some claims that, if the deal prolonged two much, Oman may prefer to tap its own gas reserves rather than buying natural gas from Iran, Zangeneh said, “Negotiations with the Omani party and other visits by [Omani] buyers dispute such claims.”

The Iranian official traveled to Muscat on Wednesday evening after attending the 16th ministerial meeting of the International Energy Forum in New Delhi to follow up on the construction of the Iranian gas pipeline to Oman.

In 2013, Iran and Oman signed a Memorandum of Understanding on Natural Gas Exports by which a gas pipeline would directly export Iran’s natural gas to Oman through the Persian Gulf.

Based on the MOU, Iran will export gas to Oman for production of annually 1.5 million tons of LNG.

The gas transfer capacity of the pipeline will be 1.5 billion cubic feet per day. A part of the capacity will be used for LNG production and the remaining gas will be used for futures markets in Persian Gulf states.